Meat+Poultry - March 2023 - 23

their business culture. Family businesses that
have built a culture of caring and the sense of
" family " beyond the core family. The belief that,
as colleagues, " we're all one big family working
together, " she said.
" I think that really had a favorable influence
on family businesses to be able to adjust
in ways that they needed to and be more
mindful and more caring of their customers
as well as their employees as we were
navigating particularly the, the initial 'scaries,' "
Sullivan said.
That culture of caring included, for
example, some companies' policies around
HR and working from home and flexible work
schedules, she said.
" Those that had a more agile and flexible
approach probably didn't see the same
degree of attrition and labor force leakage, "
Sullivan added, " and that we all know that
labor is a critical issue. So, those more caring
families may have retained better or had
employees, especially if it was a business that
was in a surge, like the food industry, right?
The demand for food and demand for meat
processing went off the charts.
" And in some instances, you saw in the
industry repercussions of those families that
maybe weren't very caring and how that
impacted their workforce or their attrition in
that workforce where people have just said,
heck with it. I'm outta here. "
Family firms also suffered as the pandemic
revealed divergent attitudes and perspectives
where before, stakeholders may not have
realized that polar-opposite attitudes existed
within the family especially in terms of how
individuals interpreted the risks associated
with COVID. For example, a decision around
wearing masks could have been easy for one
family, but not the case for other families.
" It really drove a wedge in those families, "
Sullivan said.
Another significant factor determining how
a family enterprise fared through the difficult
phases of the pandemic was whether the family
enterprise had the communication systems or
other processes in place to help them navigate
those deceptively simple decisions and to find
a way back to the place of alignment.
" Maybe not agreement, necessarily, but
at least alignment that okay, we have a fair
process, and I can see where and how this
decision was made and I can recommend it, "
Sullivan said.
MOVING FORWARD
The pandemic continues - as of March 1, 2023,
COVID-19 cases in the United States totaled
103,268,408, according to the Atlanta-based
Centers for Disease Control and Prevention.
Economic challenges are ongoing. The
Congressional Budget Office (CBO), in its
Economic Outlook for 2023 to 2033 report,
projects economic output (gross domestic
product, or GDP) to stop growing early in 2023
in response to the sharp rise in interest rates in
2022. CBO said inflation was higher in 2021 and
2022 compared to the previous four decades:
5.7% and 5.5%, respectively, as measured by
the price index for personal consumption
expenditures. And political polarization is not
subsiding any time soon. But even with these
and other challenges, opportunities remain for
family enterprises to survive and thrive with
leadership armed with critical problem solving
skills and good advisors.
FBCG's Sullivan named three trends
she and others who follow the family
business space are watching. The first is the
financial acumen of the family members,
shareholders and management. It will be up
to company leaders to ensure a company's
financial position is strong and bolstered
by good advisors especially in the current
inflationary environment.
The leading generation most likely recalls
the inflationary times of the late '70s and early
'80s. " Beyond that, everyone else has grown up
in an environment of, by and large, Shangri-la, "
Sullivan said. " They've never seen this type of
inflation. Never.
" So I think that is a really important
challenge and opportunity for those businesses
to really adapt to life in an inflationary
environment, and to knowing what levers to
pull in their operations and their financials so
they don't get in trouble with, debt covenants,
or cash flow or things of that nature; because
what we have seen even already is with the
rising interest rates in the inflation, some
banks, if they have done covenants, the bank
is saying, " not so fast on those distributions
to shareholders " - that could be a real
shock to family members that have relied on
those distributions. "
www.meatpoultry.com | 03.23 | MEAT+POULTRY
23
" These
privately
owned
businesses
have
demonstrated
remarkable
resilience and
flexibility. "
- PATRICIA SOLDANO
http://www.meatpoultry.com
Meat+Poultry - March 2023

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